J.Crew filed for bankruptcy on Monday, becoming the first business of its kind to do so since the pandemic began earlier this year. Despite being a household name, the brand came under scrutiny in recent years for failing to put a finger on the pulse of millennial consumer demands, which led to declining sales.
But if you found yourself living a middle- to upper-class lifestyle in the ‘80s, it’s likely that J.Crew played a prevalent role in your wardrobe. Their catalogs were Nantucket prep at its finest, with pages full of handsome couples boating off the Atlantic in chunky knitwear (most of which was tied oh-so-casually around tanned shoulders), striped rugby shirts that looked purposely faded by too many hours spent lounging in the sun, and smiling families in matching flannel pajamas on Christmas morning. Coincidentally, the mass retailer's once sporty, prep-school vibe is seeing a revival, with hype brands like Noah and Aries now adopting the look.
J.Crew has changed a lot since pioneering the yacht aesthetic, though.
Jenna Lyons started at J.Crew in 1990, where she began as an assistant designer of menswear and worked her way up to President and Creative Director. In total, she worked at the company for 27 years. To know J.Crew is to know Jenna Lyons, and her designs were what kept the brand afloat and popular for most of her tenure. In fact, she dressed Michelle Obama back when Barack Obama was running for President in October of 2008. But in 2017, Lyons announced that she’d be stepping down from her role at J.Crew, followed by chief executive Mickey Drexler. Lyons’ successor, designer Somsack Sikhounmuong, left soon after.
Nowadays, the aesthetic has changed. Rhinestones are encrusted on neon-colored cashmere. Otherwise basic pieces include embroidered-on kitschy phrases or emoticons, at not-so-cheap prices. According to 2019 reports, J.Crew sales decreased 4% to $1.7 billion. Total debt was around the same for the year was similar, at $1.68 billion.
According to a company announcement, J.Crew’s parent company Chinos Holdings filed for Chapter 11 protection in federal bankruptcy court for the Eastern District of Virginia this morning. Chinos Holdings will hold onto its ownership of Madewell for now, and maintain J.Crew’s e-commerce operations throughout the bankruptcy proceedings. Due to coronavirus, J.Crew has closed all 182 of its physical stores, making the brand’s e-commerce platform their only stream of revenue at this time. All Madewell stores are also closed because of shelter-in-place orders.
“This agreement with our lenders represents a critical milestone in the ongoing process to transform our business with the goal of driving long-term, sustainable growth for J.Crew and further enhancing Madewell’s growth momentum,” Jan Singer, J.Crew Group’s Chief Executive Officer said in a statement. “J.Crew and Madewell are two classic American brands with deeply loyal customers,” Kevin Ulrich of Anchorage Capital Group, one of the company’s existing lenders, added. “The significant deleveraging contemplated by this agreement, coupled with J.Crew Group’s strategy to strengthen its robust e-commerce platform to drive continued growth in its direct-to-consumer segment, will position the Company for future success.”
While J.Crew is the first fashion brand to file for bankruptcy in the wake of coronavirus, it is not alone in its financial struggles right now. Both Neiman Marcus and J.C. Penney are said to be considering filing for bankruptcy as well due to overwhelming debts, which have been made significantly worse due to COVID-19. With a rumored second wave of the virus arriving this fall, though, it’s likely that these three heritage companies won’t be the last casualties in the fashion industry.